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viktelen [127]
3 years ago
12

Canoe Company's manufacturing accounting system uses direct labor costs to apply overhead to goods in process and finished goods

inventories. Canoe Company's manufacturing costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The plant-wide overhead application rate was:
Business
1 answer:
sasho [114]3 years ago
4 0

Answer:

Estimated manufacturing overhead rate= $0.2 per direct labor dollar

Explanation:

Giving the following information:

Direct labor, $30,000

Factory overhead applied $6,000.

<u>To calculate the predetermined overhead rate, we need to use the following formula:</u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

6,000= Estimated manufacturing overhead rate*30,000

6,000 / 30,000 = Estimated manufacturing overhead rate

Estimated manufacturing overhead rate= $0.2 per direct labor dollar

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Carol and Dave each purchase 100 shares of stock of Burgundy, Inc., a publicly owned corporation, in July for $10,000 each. Caro
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b. They are treated differently because the loss in value of Carol's stock is the result of a sale, while the loss in value of Dave's stock is simply a decline in value.

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6 0
3 years ago
Toy Town is considering a new toy that will cost $49,100 in startup costs. The toy is expected to produce cash flows of $47,500
Tasya [4]

Answer:

NPV with a 14.9% discount rate: 6,329.06

The toy should be produced as the NPV is positive.

IRR = 26.65%

Explanation:

First we calculate for the NPV using the given discount rate of 14.9%

We will calculate the present value of each year cash inflow:

\frac{inflow}{(1 + rate)^{time} } = PV  

Year 1 cash inflow: 47,500.00

time   1.00

rate  0.149

\frac{47500}{(1 + 0.149)^{1} } = PV  

PV   41,340.30

Year 2 cash inflow:  18,600.00

time   2.00

rate  0.149

\frac{18600}{(1 + 0.149)^{2} } = PV  

PV   14,088.76

Then, we add them and subtract the investment to get NPV

NPV = 14,088.76 + 41,340.3 - 49,100 = 6,329.06

The toy should be produced as the NPV is positive.

Now for the IRR

That is the rate at which NPV equals zero we can solve for this using the quadratic equation as there are only two cash flow:

Year 1 will discount at (1+IRR)

Year 2 will be discount at (1+IRR )^2

So we can express and recreate the quadratic formula:

18,600 X^2 + 47,500 X - 49,500 = 0

A = 18,600

B = 47,500

C = -49,100

x_1 = \frac{-b+\sqrt{b^{2} -4ac}}{2a}\\x_2 = \frac{-b -\sqrt{b^{2} -4ac}}{2a}

We can solve and get:

x1 =  0.78957

x2 = -3.3433

We take the positive value.

and now solve for IRR

\frac{1}{1+ IRR} = 0.78957\\IRR = \frac{1}{0.78957} -1

IRR = 0,2665121 = 26.65%

This will be the IRR for the project.

4 0
3 years ago
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